Vodafone franchisees raised concerns about the “massive impact” of commission cuts on their mental health four years before 62 of them launched a £120m high court claim against the telecoms group.
In a 2020 survey, carried out shortly after Vodafone reduced fees paid to franchisees for selling its products and services, small business owners reported feeling extreme stress and anxiety. The changes came on the heels of months of trading uncertainty caused by the Covid pandemic.
Franchisees gave Vodafone a score of just 1.75 out of 5 for trust and 1.67 for feeling “truly valued” as partners. In written responses, many described serious impacts on their wellbeing. One said: “My mental health has become very poor as I am suffering from anxiety and spells of depression.” Another reported panic attacks, while a third added: “I am ill from stress and it has affected my home life.”
Some former franchisees have since told the Guardian that pressure from Vodafone executives triggered suicidal thoughts, with several saying they feared losing their homes and life savings after personal debts spiraled above £100,000. MPs have even compared aspects of the dispute to the Post Office Horizon IT scandal.
The current legal case, brought in December, claims Vodafone “unjustly enriched” itself by slashing commissions at the expense of small business owners. The 62 claimants represent nearly 40% of the telecom giant’s total UK franchisees.
Vodafone has acknowledged the concerns but disputes the allegations. A company spokesperson said: “We are sorry to any franchisee who has had a difficult experience. At Vodafone UK we encourage anyone to raise issues in the knowledge they will be taken seriously, and we always seek to resolve any issues raised. We continue to run a successful franchise operation, and many of our existing franchisees have expanded their business with us by taking on additional stores.”
The telecoms group has opened a fourth investigation into the historical conduct of its franchising division and says it will “strongly refute” the high court claim, describing it as part of a “commercial dispute.”
